Signs of Recovery In Business Still Hard To See
Posted: Sunday, November 15, 2009
by Jim Johnson
Metropolitan Mortgage
Without Jobs this Market will not recover
I want you to know that the Everett mortgage business is very slow
right now. Many of my competitors are going out of business these days.
A few are resorting to unwise business practices. But there is some
optimism because the housing market welcomed a bigger share of
first-time buyers and single women this past year, while a majority of
sellers resorted to dialing down prices to get their homes sold, a new
home buyer survey shows. Most of the business came from the tax credit
for first time home buyers.
But Everett mortgage applications to purchase a homes for sale in Everett fell to a 9 year low . This is despite almost historically low mortgage rates. So how do we reconcile the 2 paragraphs above?
First some background, the Mortgage Bankers Association said its applications for loans to buy homes fell a seasonally adjusted 11.7 percent from the week earlier, to the lowest level since December 2000. Meanwhile, applications to refinance existing mortgages increased 11.3 percent.
The trade group said 71.5 percent of total applications submitted were for refinances, compared with 66.1 percent the previous week.
The average interest rate on a 30-year, fixed-rate mortgage last week dropped to 4.90 percent, from 4.97 percent, with points increasing to 1.03 from 1.01 on 80 percent loan-to-value loans.
Now can you have increases but still be historically low? If your baseline is very low that's how.
Let's consider just who is the first time home buyer? And what is making them buy?
Home prices are way down. Interest rates are way down. Why don't we have a boom in the market? Well that's easy. There are no jobs and little job security. You can't buy if you don't have a job. And you will not buy a home if you don't feel secure in the job you have.
Yah- but who is buying?
First-time buyers had a median age of 30 and reported a median income of $61,600, the survey shows. The typical first-time buyer paid $156,000 for their home, about $9,000 less than in the Realtors' 2008 survey.
Repeat buyers were typically a few years older, 48, and earned a bit more than first-timers: $88,100. They also said they planned to stay in the home for 12 years.
Buyers generally took 12 weeks to search for a home, two weeks longer than last year. They also generally looked at 12 homes, up from 10.
Single women made up a slightly bigger share of homebuyers, accounting for 21 percent of buyers. That's a 1 percent increase from the prior-year survey. Single men accounted for 10 percent of buyers. But married couples continued to make up the majority of buyers at 60 percent, the survey showed.
Whites continued to dominate among home buyers, representing 85 percent of buyers. That trend was slightly higher than in the 2008 survey.
The median down payment home buyers made was 8 percent
More than 61 percent of buyers tapped their savings to come up with the down payment, while 22 percent received a gift from a friend or relative.
Sellers had to go the extra mile to sell their homes, with 52 percent offering incentives like paying for closing costs. They also lowered prices.
The typical home sold for 95 percent of the original listing price, the survey shows.
Everett-mortgage-on-line
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Top-level comments on this article: (1 total)Another good article, Jim. It seems that indicators of increasing sales of any type really means "up from the bottom pit but not above 2007 levels." It would be interesting to know the occupations of recent home buyers.
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